The Need and Purpose of Nature Markets

Ralph Chami

CEO & Co-founder: Blue Green Future

In this video, Ralph explores the vital link between climate change and biodiversity. He also discovers the interconnected threats of our current economic systems, the role nature plays in mitigating climate change, and why transitioning to a nature-based economy is crucial for a sustainable future.

Biodiversity

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The Need and Purpose of Nature Markets

13 mins 18 secs

Key learning objectives:

Understand the interconnected threats of climate change and biodiversity loss
Understand nature’s role in mitigating climate change
Understand why and how we can transition to a nature-based economy

Overview:

We are at a critical juncture. Humanity faces the dual challenges of climate change and biodiversity loss, largely due to our current economic systems. Yet, nature itself offers potential remedies. By preserving our natural environments, we can counter up to 37% of climate threats. Nature-based solutions (NbS), harness the power and capabilities of natural ecosystems and biodiversity. In turn, nature markets put a monetary value on nature's indispensable services, thus promoting conservation. With CO2 levels on the rise, endangering biodiversity and ecosystems, the link between the two is evident. Embracing nature can not only mitigate climate issues but also pave the way for a sustainable economic model in harmony with the UN's developmental goals.

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Summary

What is the link between climate change and biodiversity?

Climate change and biodiversity and intricately connected. Economic systems that prioritise growth have led to increased greenhouse gas concentrations, resulting in trapped heat with results in problems including rising temperatures, ocean acidification, and altered precipitation patterns. These rapid environmental changes stress species and ecosystems, particularly those already impacted by habitat destruction and pollution. Consequently, biodiversity suffers, with the risk of species extinction escalating with every degree of temperature rise. For instance, at 1.5°C warming, 4% of mammals will lose half their habitat, and this percentage grows with increasing temperature.

What role can nature play in mitigating climate change?

Nature is a formidable ally in the fight against climate change. When preserved, ecosystems significantly reduce climate risk. These nature-based solutions (NbS) harness the power of ecosystems to sequester carbon. For example, the oceans, with entities like phytoplankton, seagrasses, and mangroves, capture massive amounts of carbon dioxide annually. Moreover, animals like forest elephants in the Congo Basin and the great whales of the oceans further enhance carbon sequestration through their activities and life cycles. Essentially, by protecting and rejuvenating nature, we tap into its inherent capacity to combat climate change.

Why would we transition to a nature-based economy and use nature-based solutions?

Transitioning to a nature-based economy and employing nature-based solutions is essential for multiple reasons. A report from the Taskforce on Scaling Voluntary Carbon Markets highlights the need to reduce net CO2 emissions significantly by 2030 to maintain global warming below 1.5°C. Nature-based solutions can achieve up to one-third of these required emissions reductions. They not only sequester carbon but also catalyze a societal shift, fostering markets for environmental services, generating jobs, and unlocking new opportunities. Furthermore, they support various UN’s Sustainable Development Goals, contributing to poverty reduction, inequality alleviation, decent work promotion, and healthier living.

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Ralph Chami

Ralph Chami is a financial economist who has been at the International Monetary Fund for 23 years and is currently the Assistant Director of the Institute for Capacity Development. He founded Blue Green Future, a strategy to combat climate change and biodiversity loss, focusing on species like whales and elephants as allies. Ralph has experience working with low-income and fragile states, providing policy advice, training, and capacity development on macro-financial economic policy. His expertise includes remittances, inclusive growth, financial markets development, banking regulation, and valuing natural capital.

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